Economists: Recession to end in 2009

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jillio said:
NEW YORK (Reuters) - The Iraq war has contributed to the U.S. economic slowdown and is impeding an economic recovery, Nobel-winning economist Joseph Stiglitz says.

Meanwhile, the U.S. government is severely underestimating the cost of the war, Stiglitz and co-author Linda Bilmes write in their book, "The Three Trillion Dollar War" (W.W. Norton), due to be published on Monday.

The nearly 5-year-old war, once billed as virtually paying for itself through increased Iraqi oil exports, has cost the U.S. Treasury $845 billion directly.

"It used to be thought that wars are good for the economy. No economist really believes that anymore," Stiglitz said in an interview.

Stiglitz and Bilmes argue the true costs are at least $3 trillion under what they call an ultraconservative estimate, and could surpass the cost of World War Two, which they put at $5 trillion after adjusting for inflation.

The direct costs exclude interest on the debt raised to fund the war, health care costs for veterans coming home, and replacing the destroyed hardware and degraded operational capacity caused by the war.

In addition, there are costs not accounted for in the budget such as rising oil prices and social and macroeconomic costs, which the book details.

To illustrate how the money could be spent elsewhere, Bilmes cited the annual U.S. budget for autism research -- $108 million -- which is spent every four hours in Iraq. A trillion dollars could have hired 15 million additional public school teachers for a year or provided 43 million students with four-year scholarships to public universities, the book says.

Stiglitz and Bilmes say they were excessively conservative in calculating the $3 trillion figure, overcompensating for their bias in having opposed the war.

'FLOODING THE ECONOMY'

Asked if the war has contributed to the U.S. slowdown, Stiglitz said, "Very much so."

"To offset that depressing effect, the Fed has flooded the economy with liquidity and the regulators looked the other way when very imprudent lending was going up," Stiglitz said. "We were living on borrowed money and borrowed time and eventually a day of reckoning had to come, and it has now come."

The war has also altered how the United States has reacted to its current economic troubles, he said.

"When America's financial institutions had a problem, they had to turn to the sovereign wealth funds in the Middle East for recapitalization, for the bailout," he said.

"The reason was obvious. The war had led to high oil prices. The war had meant that America had to borrow more money. There weren't sources of liquid funds in the United States. The sources of the liquid funds were in the Middle East," he said.


Iraq war hits U.S. economy: Nobel winner | Reuters
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Yup, it's true and massive government spending on war has affect our economy, including with inflation.
 
The fact is Bush Admin. ignored the warning that economy goes bad in early 2006.

It would be different if Bush Admin. save the economy in early 2006 but they doesn´t.


 
Liebling:-))) said:
The fact is Bush Admin. ignored the warning that economy goes bad in early 2006.
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Bush even ignored signs that the economy was taking a hit last year. He continued to deny what was happening and did nothing to address it.
 
Hear Again said:
Okay. I guess that's why Americans voted for Obama instead of McCain.
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Yup, it's fact about Obama won the election but for ecoonomy, if you believe it's fact then it's fine.

I'm not very happy with Bush about handle with economy, such as oil crisis and house market issue, nowhere is good as during Clinton admin.
 
Foxrac said:
Yup, it's fact about Obama won the election but for ecoonomy, if you believe it's fact then it's fine.

I'm not very happy with Bush about handle with economy, such as oil crisis and house market issue, nowhere is good as during Clinton admin.
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There is plenty of proof to substantiate the fact that the economy has been in a depressed state for quite awhile now.

I do agree with you about Clinton. We had one of the best economies ever under his Administration.
 
i see Foxrac's point he was saying that he was simply learning economics for principles per se, not how this discipline interacts with confounding factors, but again this nearly contradicts itself, by acknowledging the backdrop of the economys for each different periods which different presidents took role in governing.
 
Grummer said:
i see Foxrac's point he was saying that he was simply learning economics for principles per se, not how this discipline interacts with confounding factors, but again this nearly contradicts itself, by acknowledging the backdrop of the economys for each different periods which different presidents took role in governing.
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Exactly. You can't say that the Vietnam war had a negative impact on the economy back in the late 60s/early 70s yet at the same time claim that the Iraq war had no impact on today's economy.
 
jillio said:
If the economy had been in such good shape, it would not have spiraled down the way it did. The oil crisis was definately a precipitating factor (there is a reason it was called a crisis), and the housing market bottomed out.
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And that all started during the Bush era, remember that. :)

Remember, please.. remember.... oil price went so high.. reaching 3 dollars a gallon... and that was BEFORE Obama was elected.

And remember, house markets went out of control and that was BEFORE Obama was elected.

Honestly, I don't think Bush has to do with both of them either. It's just convenient for people to make Bush or Obama the scapegoat for any economic problems.
 
netrox said:
Remember, please.. remember.... oil price went so high.. reaching 3 dollars a gallon... and that was BEFORE Obama was elected...Honestly, I don't think Bush has to do with both of them either.
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If I'm not mistaken, the President has no control over the price of oil.
 
Hear Again said:
Exactly. You can't say that the Vietnam war had a negative impact on the economy back in the late 60s/early 70s yet at the same time claim that the Iraq war had no impact on today's economy.
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Yup but some are difference, I remember about LBJ has high spending but tax rate in 60's is much higher than today and there's inflation problem in 70's during Nixon admin.
 
Foxrac said:
Yup but some are difference, I remember about LBJ has high spending but tax rate in 60's is much higher than today and there's inflation problem in 70's during Nixon admin.
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My point is that you can't blame the war for one Adminstration, but not another.
 
Hear Again said:
Probably because you keep contradicting yourself.
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I'm not going to discuss with you anymore because you are only one person who is difficult to understand and don't get my point.

Whatever, you said about contradicting myself then I have no idea about what are you talking but rather to make up by yourself.
 
Foxrac said:
I'm not going to discuss with you anymore because you are only one person who is difficult to understand and don't get my point.

Whatever, you said about contradicting myself then I have no idea about what are you talking but rather to make up by yourself.
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Here's a summary of the discussion you, Jillio and I have had regarding the economy and Iraq:

http://www.alldeaf.com/war-political-news/65737-economists-recession-end-2009-a.html#post1337069

http://www.alldeaf.com/war-political-news/65737-economists-recession-end-2009-a.html#post1337088

http://www.alldeaf.com/war-political-news/65737-economists-recession-end-2009-a.html#post1337094

http://www.alldeaf.com/war-political-news/65737-economists-recession-end-2009-a.html#post1337095

http://www.alldeaf.com/war-political-news/65737-economists-recession-end-2009-a-2.html#post1337101

http://www.alldeaf.com/war-political-news/65737-economists-recession-end-2009-a-2.html#post1337111

http://www.alldeaf.com/war-political-news/65737-economists-recession-end-2009-a-2.html#post1337646

http://www.alldeaf.com/war-political-news/65737-economists-recession-end-2009-a-2.html#post1337679

http://www.alldeaf.com/war-political-news/65737-economists-recession-end-2009-a-2.html#post1337681

Hopefully that clarifies why I'm confused by your posts.
 
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